Tackling Additional Insured Coverage and Related Issues
One of the most complicated—and one of the most important—coverage issues relating to commercial general liability (CGL) insurance is the creation of additional insured status for third parties. Many kinds of business relationships make it necessary for a named insured under the CGL to provide coverage under the policy for another person or organization.
Lessors seek coverage under the CGL policies of their lessees; vendors seek coverage under the policies of manufacturers or distributors of the products they sell; construction project owners seek coverage under the policies of their contractors; and general contractors seek coverage under the policies of their subcontractors and material suppliers.
Arranging such coverage is fraught with difficulties. Prospective additional insureds often do not know how to require the coverage in their contracts with named insureds. Named insureds often do not know how to comply with such contractual obligations when presented with them.
How IRMI Can Help
A wide variety of CGL endorsements exist for creating additional insured status under the policy, and the correct choice of endorsement is essential to the transfer of liability as intended by the two contracting parties. IRMI's Commercial Liability Insurance reference discusses every standard additional insured endorsement, its use, and its effect on coverage.
CLI also explains, in clear detail, the risk management and risk transfer considerations that parties should be aware of so that the proper coverage is put in place and the interests of the contracting parties are protected. Special attention is given to construction-specific additional insured endorsements such as CG 20 10 and CG 20 33, perhaps the two most widely used standard endorsements for providing additional insured status to another party.
Start leveraging IRMI's CGL resources to better understand these important coverage issues and to serve your clients or your organization more effectively when handling additional insured nuances.
